Ohio Legislature looks to deal with asbestos litigation

The Wall Street Journalreports that a bill circulating through the Ohio Legislature “aims to shed light on a nebulous aspect of asbestos litigation: bankruptcy trusts.”Such trusts are “pots of money set up by bankrupt manufacturers and sellers of asbestos products that buckled under the weight of lawsuits over asbestos-related illnesses,” the newspaper notes. “Billions of dollars are available, collectively, in the trusts to anyone who can prove their ailments stemmed from asbestos products tied to the companies that established them.” (The trusts don't disclose personal information about claimants.)Because asbestos use in the past was widespread, “victims of asbestos-related illnesses often tap numerous trusts as well as sue solvent companies in public court,” according to the newspaper.Defendants tell The Journal that plaintiffs “sometimes don't disclose in their court cases that they've already received payments from trusts.” As a result, solvent defendants say they get stuck paying more than their fair share of liability.The Ohio measure is sponsored by Rep. Louis Blessing Jr., a Republican from Hamilton County. It would require plaintiffs in court cases to disclose all trust claims they've made. The Journal reports that opponents of the measure say it would restrict plaintiffs from seeking justice from companies that harmed them.

A measure similar to Ohio's bill fizzled in Congress this year, “but supporters including the U.S. Chamber of Commerce's Institute for Legal Reform hope that if the measure passes in Ohio, it could spur other states and Congress to act,” The Journal reports.

Spanning the globe

In a finding that could be big for Ohio, a government study released on Wednesday “concluded that the national economic benefits of significant natural gas exports far outweighed the potential for higher energy prices for consumers and industrial users of the fuel,” according to this story from The New York Times.The study, prepared by NERA Economic Consulting for the U.S. Department of Energy, found domestic prices would not rise sharply as a result of exports and that export revenue would generally help most Americans.The Times says energy companies “have proposed more than a dozen projects to export gas in liquefied form to Europe and Asia, where the fuel is typically three to four times more expensive than in the United States.” The Obama administration, it notes, “has been cautious on whether to embrace large exports of gas out of concern that consumers who rely on gas for heating and cooking could see their utility prices rise.” Higher exports also could raise costs to manufacturers that now benefit from the nation's glut of cheap gas.Now that the report has been finished, observers expect more gas export projects to get the green light.“The report found that higher exports would actually generate more economic benefits,” according to The Times. “Noting that gas exports could produce up to $47 billion in new economic activity in 2020, when many new terminals would be up and running, it said, 'Welfare improvement is highest under the high export volume scenarios because U.S. consumers benefit from an increase in wealth transfer and export revenues.'”

Prognosis negative

The outlook revision “reflects our view that 2012 and 2013 operating performance and liquidity will be worse than we previously expected, owing to lower-than-expected iron ore prices and metallurgical coal prices,” according to S&P.The ratings service affirmed its ratings on Cliffs, including the "BBB-" corporate credit rating,Cliffs recently announced significant changes to its 2013 operating plan, which included delaying the expansion of its Bloom Lake mine in Eastern Canada, as well as idling a portion of its U.S. iron ore production, S&P said.S&P said its revision “uses the assumption that 2013 iron ore prices will remain around current levels of $120 per ton. As a result, we anticipate that Cliffs will generate 2012 and 2013 adjusted EBITDA of $1.4 billion and $1.2 billion, respectively, down from our previous estimates of $1.8 billion to $2 billion for each year.”In addition, S&P said the negative rating outlook “reflects our view that Cliffs' debt burden is high relative to its EBITDA and cash flow generation in the current price environment.”You also can follow me on Twitter for more news about business and Northeast Ohio.

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